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Personal Finances | Planning

Plan Your Financial Future Now

making a budgetThe best way to prepare for your financial future is to have a budget that you can follow and adjust as you work through each month. There are many doable ways to put together a budget, but all entail gathering the best information you can from your past financial records.

Using Past Expense to Predict Future Expenses

Both checking accounts and credit card records provide a good place to start. For most families, housing expense is the largest and most important expenditure. These expenses include mortgage or rent, utilities, taxes, insurance, and maintenance.

Jun 12, 2021
Private Mortgage Insurance - When is it Needed
When You Can Cancel PMI


Private mortgage insurance (PMI) is required for loans of more than 80% LTV. The borrowers pays PMI as part of their mortgage payment.

Private mortgage insurance (PMI) provides coverage to the mortgage lender in the event of default. The private mortgage insurance premium is paid by the borrower.

Mortgage lenders generally require private mortgage insurance on all high loan-to-value ratio loans (typically, loans that exceed 80 percent of the property's value). When a lender has this type of coverage, a portion of the loan is guaranteed so that the lender carries no more risk on a high loan-to-value ratio loan than it does on a loan with a ratio of 80 percent or less.

Private mortgage insurance companies offer several programs for mortgage lenders, but the most popular plan reduces the lender's risk exposure to 75 percent of the property's value or loan principal. The higher your Loan to Value the higher the PMI insurance premium.

For each mortgage loan that is to be covered, the lender submits a packaged loan file with an application for mortgage loan insurance to the private mortgage insurance company. The loan file package includes the loan application, credit report, verifications of deposit and employment, and the appraisal report. The insurance company usually completes its processing quickly - often within 24 hours - and issues a commitment to insure. Typically, the mortgage insurance is added to the monthly payment for the mortgage. The cost of such insurance can be substantial and add over $100 per month to the mortgage payment.

However there are two recent major changes to PMI insurance that benefit the consumer. First, effective January 1, 2007, PMI insurance became deductible on income tax returns.

Homeowners Protection Act

Secondly, on July 29, 1998, The Homeowners Protection Act was passed which required automatic cancellation of private mortgage insurance by the lender when the loan to value ratio reaches 78%.

As another option, homeowners are now able to ask lenders to cancel PMI after their equity reaches 20 percent as long as they are current on their loan payments and their home has not depreciated below its purchase value. Lenders may require an appraisal for determining current value before agreeing to cancel the PMI. Lenders are also allowed to continue private mortgage insurance for a longer period of time for certain high-risk loans.

The legislation requires lenders to provide disclosures to borrowers about cancellation of private mortgage insurance. Lenders are required to give an initial disclosure to the borrower at the time of closing that indicates when private mortgage insurance could be canceled at the borrower's request and when it would be automatically canceled even if the borrower did not specifically request it.

Amortization Schedule

Lenders must also provide an amortization schedule at loan closing for all fixed rate mortgage loans covered by PMI insurance.

Additionally the legislation requires that an annual disclosure be given to the borrower that would explain the borrower's right to cancel private mortgage insurance. This disclosure could be included with other annual disclosures, such as the escrow account disclosure or the report of interest paid.

If the insurance were canceled (either at the borrower's request or when automatically terminated by the lender), the lender would send a notice to the borrower. The lender would arrange for a refund of a portion of the insurance premium, if appropriate.

More info...

Jun 3, 2021
Planning a Trip to Florida?
Hotel Reservations are going fast in the Sunshine State
Now is the time to make those reservations for your next trip to Florida. You owe to yourself to head down to the land of sun and surf to enjoy a family outing. The beaches are open, the theme parks are open, and the hotels are ready. More info...

May 15, 2021
Casinos in Orlando
Orlando, Florida
Casinos in Orlando. There are no casinos in Orlando. The closest real casino is located at the Seminole Hardrock Hotel Casino in Tampa, Florida, about an hour and ten minutes away from Orlando. This Las Vegas-style casino features hundreds of slots and card rooms including high stakes poker and blackjack.
Drop over for a few nights and enjoy the action. It is an easy drive down I-4 west to Tampa. Bus shuttles are also available if you prefer. ESCOT Bus Service. Reserve your spot online or call 844-537-ROCK (7625).
Click to learn more and book a room. More info...

May 8, 2021
Mortgage Assumption Agreement
What is an assumption agreement
A Mortgage Loan Assumption Agreement is commonly used for allowing a third party to assume the obligations of a mortgage loan. The loan assumption agreement frees the original borrower from the note and mortgage.

The lender must approve any assumption agreement and will usually take steps to underwrite the assuming parties credit. More info...

Mar 21, 2021
Business Loans for LLCs
Get Multiple Quotes
Business Loans
Apply for a small business loan with one simple application and get several offers. Lenders will make offers based on your business credit and income. It cost nothing to apply so it is worth a few minutes to see what kind of loan offer suits your needs. More info...

Mar 20, 2021
Online Pet Stores
Convenient, Safe, and Cheaper
Shopping online allows you to see many more products and to easily compare prices, not to mention the time and money saved by not having to drive around. Online pet stores carry all major brands and medications for all of your animals.
including dogs, cats, and horses.
Check out prices for flea control, grooming supplies, medications, dog food, and all pet needs including cheap horse tack and barn supplies. More info...

Mar 19, 2021
VA Mortgages and Refinances
Active Duty Military, Retired, and Former Military
VA Mortgages require no down payment and are available to anyone who is currently serving in the US military or has served honorably in the military in the past. Check out current interest rates and see how much house you can afford. If you have a present VA mortgage you may be able to save hundreds of dollars in monthly payments. More info...

Mar 17, 2021
Planning for College
Acceptance Letters
Most college applicants have by now heard back from the colleges where they have applied. Since many will have more than one option, financial decisions should come into play before making a final decision.
The most direct comparison comes from financial aid being offered by the college. All things being equal, the most financial aid wins. However, there are other issues that might be considered such as the prestige of the institution and even how far it is from home.
Students that will have to borrow money for tuition will have to make harder decisions. That might mean staying at home and going to a local college or choosing a less expensive, less prestigious school. Remember, there will be payback of the loans in the future, and a more expensive school might not translate to more income when you graduate. More info...

Money Smart News Continued...

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